In My Words: Why North Carolina should legalize sports betting

In an opinion article published in the Greensboro News & Record, Elon assistant professor of sports management Bill Squadron advocates for the legalization of sports betting in North Carolina.

By Bill Squadron 

Americans in 21 states have legally wagered over $65 billion on sports since the Supreme Court lifted the ban on sports betting three years ago.

But none of that money has been bet by North Carolinians, despite the state’s well-known zeal for sports.

Bill Squadron, assistant professor of sport management

The North Carolina Senate has moved to change that picture, passing SB 688 in August, which would authorize online and mobile sports betting in the state. The House is considering a companion bill, HB 631.

It should pass that bill, and Gov. Roy Cooper should sign it. This would create jobs, generate new tax revenue and allow North Carolina sports fans to do lawfully what so many of them already do with illegal, online and offshore bookmakers — bet on college and pro games.

As NBA Commissioner Adam Silver wrote some years ago, prohibiting betting on sports did not stop it; it just went underground. This kept states from regulating it, monitoring it and taxing it — and forced otherwise law-abiding citizens to take their interest in wagering on a game to the shadowy world of offshore bookies.

As Silver wrote, “sports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.”

Before the Supreme Court struck down in May 2018 the federal law banning sports betting, the American Gaming Association had estimated that Americans were betting as much as $400 billion illegally every year on athletic contests.

We have seen this movie before. Prohibition didn’t work, and neither does a ban on betting. It is far wiser to acknowledge that fact and address it properly through a sound regulatory approach.

The bills moving through the legislature would provide a solid framework, authorizing the Lottery Commission to award licenses to betting operators and to oversee the market. The legislation, however, could benefit from several changes as the House considers it.

First, the 8% tax rate that betting operators would have to pay is too low. It would be among the lowest in the nation. Tennessee’s rate is 20%, and Virginia’s is 15%. The House should increase it to at least 12%.

How much of a difference would this make in new state revenue to pay for education, roads, health care, etc.? New Jersey, which has 2 million fewer residents than North Carolina, will generate at least $600 million in taxable sports betting revenue this year. At a 12% tax rate, the state would receive $72 million in additional funds, assuming the same level of gambling activity — and North Carolinians certainly are no less enthusiastic about sports than New Jersey fans.

The legislation should also not allow betting operators to deduct their promotional bonus bet values from their total revenue. That is their marketing choice.

It limits the number of bookmaker licenses that the Lottery Commission may award to 12. There is no need for a limit as long as the required background checks take place and applicants meet all conditions.

The new law should also assure that the commission has the resources and expertise to carry out this new mandate. It is a complicated area, and requires a sufficient, knowledgeable government team to get it right.

Finally, while the bill has several provisions that address the issue of gambling addiction those requirements should be strengthened. While illegal betting leads to addiction, legalization will create an additional number of problem gamblers. Both the industry and the state must take active steps to prevent and treat addiction. Specifically, both parties should commit more funds and resources to education about problem gambling and treatment for addicts.

Bringing this popular activity out of the shadows and into the light will yield numerous benefits. Sports fans in many states — including our neighbors — are reaping those benefits (as well as driving state revenues). We should join them.

Bill Squadron is an assistant professor of sports management at Elon. Views expressed in this column are the author’s own and not necessarily those of Elon University.